The Hindu Business Line : Britain's Costa Coffee to set up shop in India — Whitbread Plc in pact with R K Jaipuria group

The £1.8-million British leisure company, Whitbread Plc, today announced a franchise agreement with the Delhi-based R K Jaipuria Group for opening Costa Coffee outlets across the country.

Costa Coffee, which Whitbread claims is the largest coffee retail chain in Britain, would become the first international chain to set foot in India even as several other international brands -- including Starbucks - have been planning an entry into the country for quite some time.

Besides setting up Costa Coffee outlets with Jaipuria, Whitbread also plans to establish its first roastery outside Britain here over the next 12-18 months, with an investment of £2 million. It will then enter the wholesale coffee business in India.

The roastery will be used to supply coffee not only to the Indian market, but also for exports to neighbouring countries.

"India's economy is growing rapidly, resulting in a growing middle class. With the fast food sector projected to grow close to 40 per cent, local concepts such as Barista and Café Coffee Day have proven that the Indian consumer has empathy with the concept of a branded coffee offering," Costa's Franchise and Commercial Director, Mr Nick Williams, said here.

R K Jaipuria group promoter, Mr Ravi Jaipuria, said the group plans to open 20 outlets in the first year of operation in the National Capital Region and aims to take this up to 300 outlets by 2010 with total investment between Rs 125-150 crore.

All the outlets will be company owned. He said the venture should break even within the first year of operation.

Meanwhile, Mr Williams said that while up to 85 per cent of Costa's menu in India would be similar to that in Britain and elsewhere, there would be some amount of customisation to the Indian palate.

On how the Costa Coffee chain would be different from existing coffee retail chains such as Barista and Café Coffee Day, he said it would be in the ambience and coffee drinking experience.

He also made it clear that the chain will neither be premium-priced nor cater to the low-price end of the fast food market, but somewhere midway.

Jaipuria, who is also the franchisee for several other brands including Pepsi, Pizza Hut and Cream Bell ice-cream, said if the respective companies agree, there might be common outlets where all the brands along with Costa Coffee are available under one roof.

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